A huge rescue operation is underway after a ferry carrying 475 passengers and 150 vehicles capsized and sunk off the coast of South Korea this morning.

Two people have so far been found dead after the boat, identified as the Sewol, sunk off the southwest coast.

The South Korean coastguard said this morning 164 people have been rescued from the vessel, but more than 300 passengers are thought to remain unaccounted for.

However, earlier reports suggested more than 360 people had been taken to safety, including 338 students and teachers.

We'll be bringing you live updates on the rescue operation here as it unfolds.

8:43 am

The ferry was carrying passengers en route to Jeju island, which is about 100 km (60 miles) south of the Korean peninsula, when it began to list badly and sent out a distress signal.

Reports say there was a loud impact and noise before the ferry started sinking, according to a passenger who had been rescued from the vessel.

An official from the Danwon High School in Ansan, in the capital Seoul, said all its pupils had been taken to safety, but this was not confirmed by the coastguard. They had been on a field trip to Jeju.

34 ships and 18 helicopters are involved in the rescue mission this morning.

8:52 am

This is the dramatic scene at the site of the sinking this morning.

Helicopters and life boats are on their way to the stricken vessel in the hope of helping survivors.

The South Korean Government is reported to have said 95% of the ship is now submerged under water.

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The capsized ferry

8:59 am

The American Navy has sent a ship to join the search-and-rescue operation for the 300 passengers missing after the ferry sinking.

The US Seventh Fleet said the amphibious assault ship USS Bonhomme Richard, which has helicopters on board, was on a routine patrol off South Korea’s west coast and was on its way to the scene of the accident.

This image shows some of the life boats and rescue vessels heading towards the ferry.

9:30 am

This video shows the boat's wreckage in the water.

Sky News is reporting that the two people confirmed dead are a male student and a female crew member.

The live stream above shows some of those passengers who survived waiting for news.

Some are still wearing their life jackets, while others, wrapped in blankets are in tears.

It's understood that one of those who died in the sinking was found inside the ferry, while the second died after arriving at Mokpo Hankook hospital on the South Korean mainland.

These images show some of those rescued being brought onto land in Jindo.

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10:13 am

The three-fold increase in the number of people missing after the Sewol sinking has been put down to a miscalculation by officials.

It was first reported this morning that around 100 people were unaccounted for with 368 people rescued, but the number of missing increased to 300 shortly after, with 164 now confirmed rescued.

The number of confirmed fatalities still stands at two.

Most of those on board were children and their teachers from a Seoul high school who had been on a field trip.

An official from the school said earlier this morning all 338 students and staff had been rescued, but this has not been independently confirmed and confusion still surrounds who has been pulled safely from the water.

10:39 am

South Korea's vice minister of security Lee Gyeong-Og has told journalists that the country's president has called for maximum efforts to rescue all the passengers, and "not to miss any one of them in cabins or engine compartments".

He said the South Korean coastguard's rescue HQ and the Oceans and Fisheries Ministry HQ are both in action, as well as the National Emergency Management Agency.

10:48 am

The video below shows the ferry capsizing earlier today, and people being winched to safety from the vessel.

Passenger Cha Eun-ok, who was on the deck of the ship taking photographs when it began to sink, said: "It was fine then the ship went 'boom' and there was a noise of cargo falling."

"The on-board announcement told people to stay put... people who stayed are trapped."

Confusion remains about the total number of passengers on board the Sewol, as authorities revised the figure down from 477 to 459 saying some had been double counted.

A crew member of a government ship involved in the rescue, who said he had spoken to members of the sunken ferry’s crew, said the area was free of reefs or rocks and the cause of the disaster was likely some sort of malfunction on the vessel.

There were reports of the ferry having veered off its course but coordinates of the site of the accident provided by port authorities indicate it was not far off the regular shipping lane.

11:22 am

A couple of hours after survivors heard a "loud impact" on board the ferry, the ship had almost completely sunk.

After hearing the noise, it started listing and rolling, before lying on its port side.

Soon after the ship had completely turned over, with only the forward part of its white and blue hull showing above the water.

The ship has a capacity of about 900 people, an overall length of 146 metres (480 feet) and it weighs 6,586 gross tonnes.

Shipping records show it was built in Japan in 1994.

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11:40 am

It's being reported by South Korea-based YTN English News that the South Korean Government has now confirmed a third person has died.

It is believed to be another male student from Ansan Danwon High School.

11:53 am

This is the American Navy ship that has joined the rescue effort in South Korea.

The USS Bonhomme Richard had been in waters near the Korean peninsula when the disaster happened,

Commander of US Naval Forces in Korea Lt Arlo Abrahamson told Stars and Stripes: "This is about helping friends, and the US 7th Fleet will continue to provide assistance at the request of the ROK."

The US Embassy in Seoul said: "Our thoughts are with the passengers of the Korean ferry that ran aground today and their families."

There are further reports this afternoon that passengers were told to stay on board the sinking ship even after it began to fill with water.

The BBC reports that one passenger has told local TV: "The announcement told us to stay still, but the ship was already sinking and there were lots of students who did not get out of the ship."

2:58 pm

The number of people still missing has now been put at 284.

The official death toll stands at four, and a frantic rescue operation is continuing late into the night under the light of flares.

The families of those still unaccounted for face agonising uncertainty as divers searching for those trapped in the largely submerged ship have been forced to suspend their work until daybreak tomorrow.

Seoul-based journalist Joseph Kim says a female student - one of hundreds from a school in the capital who were on board the ship - texted her mum to say "I love you" because she didn't know if she'd make it. She has still not been found.

3:24 pm

Desperate parents gathered outside Danwon school when news of the disaster first broke in the morning, and fought their way on to coaches provided to take them on to Jindo.

Park Seong-ho, the father of a 17-year-old boy who had been on board the ferry, but who had not been in contact, said before leaving: "I have to go now. It is as if the world is falling apart. I really want to go now to see my son."

Jeong Kyung-mi, mother of another 17-year-old from the school, was more fortunate. She received a text message from her son saying he had been rescued with friends and was safe.